April 17, 2008

Global Warming's Impact On Food Prices

The primary culprits for the much-discussed spike in global food prices are increased demand, the cost of oil, and biofuels subsidies. But, as Keith Bradsher highlights in an excellent piece in today's New York Times, climate change is starting to play a role, too:

Drought has already spurred significant changes in
Australia’s agricultural heartland. Some farmers are abandoning rice,
which requires large amounts of water, to plant less water-intensive
crops like wheat or, especially here in southeastern Australia, wine
grapes. Other rice farmers have sold fields or water rights, usually to
grape growers.

Scientists and economists worry that the
reallocation of scarce water resources--away from rice and other
grains and toward more lucrative crops and livestock--threatens poor
countries that import rice as a dietary staple.

On the plus side, at least Australia—unlike, say, the United States—has a market for water rights, so that increasingly scarce resources can be employed for the most productive purposes. But that means, of course, that the price of staple foods for people in the developing world will rise even faster, especially since agriculture in the tropics will likely take a big hit as global temperatures increase, while farms further from the equator might actually benefit slightly (at least at first). Even if new foodstuffs from Canada and Russia replace the lost output in the tropics, the distributional consequences of this shift aren't going away anytime soon.